Polymarket Trails Behind Rivals as Trading Volume Falls for Second Month

Prediction market operator Polymarket recorded a second consecutive month of declining trading volume on its international platform in May, a significant reversal from the rapid growth it saw earlier this year.  

According to data from Dune Analytics, the platform processed just short of $7.1 billion in trading volume during May, down from more than $9 billion in April and below its March peak of $10.5 billion.  

The decline follows a period between August and March when trading volumes increased by more than 850%. The downturn also coincided with a fall in monthly active users. Participation peaked at more than 780,000 users in March before dropping to fewer than 650,000 in May. 

Polymarket has also faced pressure from rivals prediction market apps, including Kalshi, which recorded more than $17.9 billion in trading volume in May alone. 

Yet, while international activity weakened, Polymarket’s US platform continued to grow. Domestic trading volume rose to $1.77 billion in May, up from $1.26 billion in April. The company also reported strong increases in new users and active traders during the 30 days ending June 3. 

A company spokesperson attributed some of the international decline to technology maintenance in the spring, as well as the switch to a new token, Polymarket USD, which led to an adjustment period for users.  

Despite this, Polymarket is already seeing signs of improvement, with its international platform recording $1.9 billion in trading volume in the first week of June, its highest weekly volume since April. Polymarket also aims to capitalize on the upcoming World Cup, anticipating higher participation across its markets in the coming weeks.  

Polymarket investigates Kalshi espionage claims 

Polymarket’s rivalry with Kalshi took on another dimension this month with the news that Polymarket is investigating what it believes could be incidents of corporate espionage by Kalshi. 

The company says it has created a dossier examining what it says are repeated examples of similar product launches, marketing campaigns, and announcements appearing just after its own launches.  Polymarket executives say the timing of several events has raised concerns.  

Among the incidents under review is a promotional campaign in February that involved a temporary grocery store in New York. According to Polymarket, they had spent months preparing the event before Kalshi launched a separate grocery-themed promotion just beforehand.   

Polymarket is also examining the timing of announcements on its perpetual futures-style trading products, after Kalshi launched a similar product shortly before its own launch.  

According to reports, some employees have also discussed whether information could have been acquired by individuals with access to company operations. Concerns have reportedly been raised about the location of venture capital firm Paradigm, a significant backer of Kalshi, which is based close to Polymarket's headquarters.  

In response, Kalshi said that the claims were unfounded and that it was focused on developing its own platform. It is not yet clear what action, if any, Polymarket is planning to take.